Benefits of clean development mechanism 2011

BENEFITS OF THE CLEAN DEVELOPMENT MECHANISM 2011

Benefits of the clean development mechanism2011

CLEAN DEVELOPMENT MECHANISM

Kapitel XXXBenefits of the Clean Development Mechanism 2011United Nations

Framework Convention onClimate Change

Benefits of the Clean Development Mechanism 2011United NationsFramework Convention onClimate Change

TABLE OF CONTENTS

executive summary 5

i. introduction 7

ii. contriBution to sustainaBle development 9

2.1. Definition of sustainable development 9 2.2. Assessing sustainable development 9 2.3. Indicators of sustainable development 11 2.4. How clean development mechanism projects contribute to sustainable development 11 2.5. Sustainable development contributions by UNFCCC project category and UNEP project type 12 2.6. Sustainable development contributions by host country 14 2.7. Trends in sustainable development contributions 15 2.8. Comparison of claims in product design documents and survey responses 16 2.9. Other studies on sustainable development and the clean development mechanism 17

iii. technology transfer via clean development mechanism projects 21

3.1. Definition of technology transfer 21 3.2. Technology transfer claims of clean development mechanism projects 22 3.3. Technology transfer by project type 22 3.4. Technology transfer by host country 24 3.5. Trend in technology transfer 25 3.6. Comparison of claims in project design documents and survey responses 26 3.7. Other studies on technology transfer and the clean development mechanism 27

iv. investments in and costs of clean development mechanism projects 29

4.1. Investment triggered by clean development mechanism projects 29 4.2. Cost of emission reductions 31 4.3. Other studies on costs of the clean development mechanism 35

v. opportunities for improvement 37

vi. references 39

vii. annexes/taBles 41

acknowledgements 47

4


Annual Report 2011CDM fit for the present, fit for the future

5


As the Kyoto Protocol’s five-year first commitment period

(2008–2012) draws to a close, it is time to assess the overall

use and effectiveness of the clean development mechanism

(CDM). This is the first in a series of reports, which

provides an overview of the contribution of CDM project

activities to sustainable development, technology transfer

and investment.

The CDM was designed to meet a dual objective: to help

developed countries meet a part of their emission

reduction targets under the Kyoto Protocol and to assist

developing countries in achieving sustainable development.

While CDM projects provide tradable saleable certified

emission reduction (CER) credits for participants in these

projects, they can also provide benefits such as new

investment in developing countries, transfer of climate-

friendly technologies, the improvement of livelihoods and

skills, job creation and increased economic activity.

This study analyzes the claims made by project participants

in the project design documents (PDDs) of 3,276 CDM

projects that were registered by the CDM Executive Board

on or before 31 July 2011. It focuses specifically on three

issues: sustainable development benefits associated with

CDM projects, technology transfer prompted by CDM

projects, and investment flows generated by CDM projects.

The results have been compared with other studies to

identify common trends and issues.

contriBution to sustainaBle development

Several attempts have been made to understand how a

CDM project contributes to sustainable development or to

assess how much a CDM project contributes to sustainable

development. Most studies conclude that

hydrofluorocarbon (HFC) and nitrous oxide N2O related

projects yield the fewest sustainable development benefits,

but the studies differ in their assessment of other project

types. Other studies suggest a trade-off between the goals

of the CDM in favour of producing low-cost emission

reductions at the expense of achieving sustainable

development benefits.

This study shows that most CDM projects claim several

sustainable development benefits such as employment

creation, the reduction of noise and pollution, and the

protection of the natural resources. The type of benefit

claimed has not changed significantly over time, but the

mix of benefits claimed is somewhat different by host

country and project type. There is also evidence to suggest

that CDM projects are indeed making a contribution to

sustainable development over and above the mitigation of

greenhouse gas (GHG) emissions in the host country.

contriBution to technology transfer

The need for technology transfer has been shown, in this

and other studies, to fall over time as local sources of

knowledge and equipment become more available and

expertise on available technologies grows. This reflects a

contribution made by the CDM to a developing country

and the increasing maturity in the countries use of the

CDM as the need for the further inflow of technology is

reduced. However, the vast majority of developing

countries involved in the CDM currently remain at the

stage at which substantial levels of technology transfer still

need to be, and are being, received.

The technological capacity of a country tends to be higher

if a country has a larger population, more official

development assistance (ODA) per capita, a higher ranking

for the ease of doing business and a higher score on the

democracy index. For those host countries technology

transfer via the CDM is less likely to occur. However,

technology transfer via the CDM typically responds quickly

(in a year or two) to changes to these country

characteristics.

executive summary

6


Executive summary

contriBution to financial flows

Annual investment in registered CDM projects rose from

USD 40 million in 2004 to USD 47 billion in 2010 and now

totals over USD 140 billion to mid 2011. The average

investment per project is approximately USD 45 million.

Over 75 per cent of projects in the Asia-Pacific region, have

a 15 per cent higher average investment than all other

projects. In all other regions, the average investment is

generally less than half of the global average.

The average abatement cost for all types of CDM projects

with a renewable crediting period is USD 2/tonne of

carbon dioxide equivalent (t CO2 eq) and USD 10/t CO2 eq

for projects with a fixed crediting period, except solar

projects, which tend to be much more expensive. Projects

have a greater potential to be profitable the longer they

operate, which indicates a healthy market condition

conducive to attracting more projects into the CDM

pipeline. The average cost, however, varies considerably by

project type and even more so by crediting period. The

fact that some market participants choose a shorter

crediting period, which may also result in lower expected

returns as compared to a longer crediting period, indicates

that the motivation for implementation of these projects

may also be due to other reasons such as to assist research

in renewable technologies that potentially have a lower

abatement cost in the long run.

It is also apparent from other studies that investors focus

on projects with low abatement cost so the CDM market is

operating efficiently. Other studies also suggest that there

is significant untapped potential for CDM projects in many

countries that already make use of the CDM and its

benefits.

7


As set out in Article 12, paragraph 2, of the Kyoto Protocol,

the purpose of the CDM is to assist developing countries in

achieving sustainable development and in contributing to

the ultimate objective of the Convention (i.e. to achieve a

stabilization of atmospheric GHG concentrations at a level

that will prevent dangerous human induced climate

system interference) and to assist developed countries in

complying with their emission limitation and reduction

commitments.

Climate change mitigation projects in developing

countries can yield numerous benefits, such as the transfer

of technology, rural energy provision, reduction of

pollutants, contributions to livelihood improvement,

employment creation and increased economic activity.

This study presents evidence relating to the benefits of the

CDM to developing countries. Specifically the CDM’s

contribution to sustainable development and to technology

transfer is examined as well as emerging patterns in

project investment and costs.

The evidence comes from five sources:

• Data captured from the project design documents

(PDDs) of CDM projects and programmes of

activities1 (PoAs) registered and ruled 2 as such by 31

July 2011 (3,266 projects and 10 PoAs) 3;

• Responses to an ongoing survey 4 of project

participants concerning the sustainable

development and technology transfer impacts of

their projects and PoAs (409 responses 5);

• Published research on and analyses of the CDM and

its impacts;

• The United Nations Environment Programme (UNEP)

Risø Centre CDM Pipeline 6. These data were used to

classify projects by UNEP type and subtype;

• The Institute for Global Environmental Strategies

(IGES) CDM Project Database 7. These data were used

for establishing the start of the CDM projects.

This study is structured as follows. Section 2 summarizes

the claimed contributions of CDM projects 8 to sustainable

development in their host countries. Section 3 highlights

the transfer of technology via CDM projects. Section 4 sets

out estimates of the investment triggered by CDM projects

and abatement costs for various types of CDM projects.

Finally, section 5 discusses opportunities for improvement

and further work.

i. introduction

1 UNFCCC, 2009, p. 23

2 Projects for which the registration date and the decision to register by the CDM Executive Board was on or before 31 July 2011. A project can be registered after 31 July with a registration date before 31 July so long as it was submitted (as complete) to the secretariat before 31 July (see the Procedure for requests for registration of proposed CDM project activities, available at <https://cdm.unfccc.int/Reference/Procedures/index.html>).

3 These data represent approximately 95 per cent of all registered projects before 31 July 2010. Technology transfer data are available for 3,232 projects, sustainable development data for 2,250 projects, capital investment for 1,676 projects and operating expenditures for 1,148 projects. All other data are based on the 3,276 projects.

4 <https://www.research.net/s/unfccc>

5 As at 1 September 2011.

6 The UNEP Risø Centre CDM Pipeline provides monthly updated data for most CDM projects. Available at: <http://www.cdmpipeline.org/>.

7 The IGES Market Mechanism Group provides monthly updated data for most CDM projects. Available at: <http://www.iges.or.jp/en/cdm/index.html>.

8 Unless otherwise stated, for ease of exposition “projects” should be interpreted to include “PoAs”.

8



9


2.1. definition of sustainaBle development

The Brundtland Report, Our Common Future, defined

sustainable development as “development that meets the

needs of the present without compromising the ability of

future generations to meet their own needs”.9 It spawned

an extensive body of literature on the concept of

sustainable development as well as numerous attempts to

measure whether specific actions contribute to sustainable

development.

Despite these efforts, there is still no universally accepted

definition of sustainable development or an agreed basis

for determining whether a specific action, such as a

proposed CDM project, would contribute to sustainable

development. However, it is widely agreed that

sustainable development comprises of three mutually

reinforcing dimensions, namely economic development,

social development, and environmental protection.10

Owing in part to the absence of an accepted international

definition of sustainable development, the responsibility

for determining whether a CDM project contributes to

national sustainable development as defined by the host

country currently resides with its designated national

authority (DNA). The DNA therefore states in its letter of

approval of the CDM project that, in its judgment, the

proposed CDM project will contribute to the country’s

sustainable development. 11 A designated operational entity

(DOE) must ensure confirmation by the DNA of the host

country that the project activity assists in achieving

sustainable development in the host country.12

2.2. assessing sustainaBle development

Assessing the contribution of the CDM in assisting host

countries in achieving sustainable development is

challenging for the same reason – the lack of an agreed

operational definition. Two types of assessment of the

contribution of the CDM to sustainable development are

possible on a project-by-project basis:

• How a CDM project contributes to sustainable

development; and

• How much a CDM project contributes to sustainable

development. 13

To determine how a CDM project contributes to sustainable

development requires only a list of sustainable

development indicators against which a project is assessed

to show the nature of its contribution. 14

How much a CDM project contributes to sustainable

development requires a list of indicators, a quantitative or

qualitative measure for each indicator that can be used to

score the project, and weights that allow the scores for the

different indicators to be aggregated into an overall

measure of the extent of the contribution to sustainable

development. Only two studies – by Sutter and Parreño

(2007) and Alexeew et al. (2010) – attempt such an

assessment. They are summarized in section 2.9 below.

ii. contriBution to sustainaBle development

9 World Commission on Environment and Development, 1987, p. 8.

10 Adams, 2006; Olsen, 2007; and Alexeew, et al., 2010.

11 Olsen and Fenhann, 2008, table 1, p. 2821, summarizes the approaches used by seven countries. Sterk et al., 2009, summarizes the sustainable development requirements of 15 DNAs using the Gold Standard as a basis.

12 Decision 3/CMP.6, paragraph 40

13 Olsen and Fenhann, 2008, p. 2820.

14 Olsen and Fenhann, 2008, uses this approach.

10


Contribution to sustainable development

Dimension Indicator Description

Economic Direct/indirect financial

benefit for the local and/or

regional economy

Economic improvements for the population through: domestic or community

cost savings; poverty reduction and support for entrepreneurial activity in the

local economy; financial benefits of the project for the national economy of the

host country; enhancement of the local investment and tourism; improvement

of trade balance for the country; reinvestment of clean development mechanism

proceeds into the community; creation of tax revenue for the community

Local/regional jobs generated

directly/indirectly

Economic improvements through direct or indirect job creation or retention of jobs,

during the operation and construction phases. Poverty alleviation is often cited as

an indirect benefit of this

Development/diffusion of

local/imported technology

Development, use, improvement and/or diffusion of a new local or international

technology, international technology transfer or an in-house innovative technology

development has taken place serving as an example for others to emulate

Investment in the local/

regional infrastructure

Creation of infrastructure (e.g. roads and bridges) and improved service availability

(e.g. health centers and water availability)

Environment Efficient utilization of natural

resources

Promoting comprehensive utilization of the local natural resources (i.e. avoiding

biomass decay and utilizing biomass for energy, utilizing water and solar

resources); promoting efficiency (e.g. compact fluorescent lamps rather than

incandescent lamps); recycling; creating positive by-products

Reduction in noise, odours,

dust or pollutants

Reducing: gaseous emissions other than greenhouse gases; effluents; and odour

and noise pollution; and enhancing indoor air quality

Improvement and/

or protection of natural

resources

Improvement and/or protection of natural resources, including, inter alia, the

security of non-renewable resources such as fossil fuels, or of renewable resources

such as: soil and soil fertility; biodiversity (e.g. genetic diversity, species, alteration

or preservation of habitats existing within the project’s impact boundaries

and depletion level of renewable stocks like water, forests and fisheries); water,

availability of water and water quality

Available utilities Supplying more or making less use of energy; stabilizing energy for the promotion

of local enterprises; diversifying the sources of electricity generation

Promotion of renewable

energy

Converting or adding to the country’s energy capacity that is generated from

renewable sources; reducing the dependence on fossil fuels; helping to stimulate

the growth of the renewable power industries

Social Labour conditions and/or

human rights

Project will improve working and/or living conditions

Promotion of education Improved accessibility of educational resources (reducing time and energy spent

by children in collecting firewood for cooking, having access to electricity to study

during the night, and supplementing other educational opportunities); donating

resources for local education

Health and safety Improvements to health, safety and welfare of local people through a reduction

in exposure to factors impacting health and safety, and/or changes that improve

their lifestyles, especially for the poorest and most vulnerable members of society

Poverty alleviation Emphasis on the respective country’s core development priorities (i.e. poverty

alleviation)

Engagement of local

population

Community or local/regional involvement in decision-making; respect and

consideration of the rights of local/indigenous people; promotion of social

harmony; education and awareness of local environmental issues; professional

training of unskilled workers; reduction of urban migration

Empowerment of women,

care of children and frail

Provision of and improvements in access to education and training for youth and

women; enhancement of the position of women and children in society

Table II-1. Sustainable development dimensions and indicators for clean development mechanism projects

11



2.3. indicators of sustainaBle development

A list of sustainable development indicators is a

requirement for both types of assessment. As yet there is

no agreed list of indicators suitable for CDM projects. In

this study a set of 15 indicators was empirically derived

from a representative sample of 350 CDM projects. These

indicators, presented in table II-1, cover the economic

development, environmental protection and social

development dimensions of sustainable development.

They encompass most of the criteria used by other

studies.15 The descriptions attempt to clearly distinguish

the different indicators so that claimed benefits can be

assessed consistently.

The sustainable development claims in the PDDs of 2,250

of the projects registered as at 31 July 2011 were tabulated

using the indicators in table II-1.16 Up to four indicators

were assigned to each project. This was sufficient to cover

all of the sustainable development claims for most, but not

all, projects.17 Thus, a small number of indicators 18 are not

captured for projects to which more than four could apply.

Assessing the statements from various sections of the

PDDs 19 involves some subjectivity. Different analysts and

assessment procedures may assign different indicators to

a given project.20 This is confirmed by the survey responses

of multiple participants for the same project: for some

projects the sustainable development indicators assigned

differ slightly. With a large number of projects it is

expected that there is no systematic bias due to such

potential assessment differences.

Many projects claim reduction of GHG emissions as

a contribution to sustainable development. A reduction

in GHG emissions is excluded from the sustainable

development indicators since this is a prerequisite for a

CDM project.

The indicators in table II-1 were also used in the survey

of project participants in which respondents were

asked which of the indicators – up to four – apply to

their project.

2.4. how clean development mechanism projects contriBute to sustainaBle development

The indicators for the 2,250 projects are used to describe

how CDM projects claim to contribute to sustainable

development.21 The indicators are based on information in

the PDDs, which reflects the expected contributions at the

time the project is being validated. The actual

contributions may differ, an issue that is explored in

section 2.8 below.

Figure II-1 shows the number of projects that mentioned

each of the 15 indicators. The sustainable development

benefits claimed most frequently are employment creation

(23 per cent of the projects) and reduction in noise, odours,

dust or pollution (17 per cent of projects). Although the

percentages are very different, Olsen and Fenhann found a

similar pattern: employment generation was the most

likely impact, followed by contribution to economic

growth and improved air quality.22

As shown in figure II-1, claims of environmental (51 per

cent of projects) and economic (43 per cent of projects)

benefits far exceed those of social benefits (6 per cent of

projects). In contrast, Olsen and Fenhann found the

distribution of claimed benefits among the three

dimensions to be fairly even, with the most claimed

benefits in the social dimension, followed by the economic

and environmental dimensions.23

15 Input from Luz Fernandez; Charlotte Unger; Alexeew, et al., 2010; Huq, 2002; Nussbaumer, 2009; Olsen and Fenhann, 2007; Sutter and Parreño 2007; and Sterk et al., 2009.

16 Constraints dictated that only 2,250 of the projects could be coded. The 2,250 projects provide good coverage of all host countries and project types. No verification of the claims made in the PDDs was undertaken.

17 50 per cent of the projects have four indicators, 30 per cent have three indicators, 15 per cent have two indicators, 5 per cent have one indicator

18 Less than 10 per cent

19 Most information on sustainable development contributions is found in section A.2. Description of the project activity, where the view of the project participants on the contribution of the project activity to sustainable development is requested (maximum one page).

20 Olsen and Fenhann, 2008, p. 2823.

21 So that the contribution of each project has the same weight, the indicators for each project have a total weight of 4 – if there are four indicators they each have a weight of 1, if there are three indicators they each have a weight of 1.333, if there are two indicators each has a weight of 2 and a single code is given a weight of 4.

22 Olsen and Fenhann, 2008, p. 2825, based on analysis of 296 projects in the pipeline as at 3 May 2006.

23 Olsen and Fenhann, 2008, p. 2825. In some cases the distribution of claimed benefits among the three dimensions is not directly comparable. For instance, Olsen and Fenhann categorized employment as a social benefit, whereas in this study it is categorized as an economic benefit.

12


2.5. sustainaBle development contriButions By unfccc project category and unep project type

The sustainable development claims by UNFCCC project

category are shown in figures II-2. The project categories

and their definitions are presented in table VII-8 in the

annex to this document. In every project category one or

more projects claim at least nine of the 15 sustainable

development indicators; waste energy projects mention

the fewest (nine), while industrial gas projects mention the

most (14). Projects in each category mention so many

indicators; it is not surprising that there is no category of

projects that has one or only a few indicators. With one

exception, no indicator is mentioned by more than 25 per

cent of the projects in a category. The exception is

“improvement and/or protection of natural resources”

which is mentioned by 36 per cent of the afforestation and

reforestation projects. The largest social contributions are

claimed by industrial gas projects, mainly through the

engagement of the local population and promotion of

education.

The sustainable development claims by UNEP project type

are shown in figure II-3 and their definitions are presented

in table VII-9 in the annex to this document. Projects of

each project type claim between three and 13 of the 15

sustainable development indicators, with an average of

almost nine. Carbon dioxide (CO2) usage projects claim

the fewest categories of benefits (three), while energy

efficiency supply-side projects mention the most (13). For

project types that mention only a few indicators, some are

claimed by a large percentage of the projects: efficient

utilization of natural resources by 50 per cent of the CO2

usage projects and both local/regional jobs generated

directly/indirectly and improvement and/or protection of

natural resources by 42 per cent of the afforestation

projects.

Although the UNEP project types were revised in 2009, so

the project types in figure II-3 are not identical to those

used by Olsen and Fenhann. They found that HFC and N2O

projects claim the least sustainable development benefits,

while energy distribution projects have the most, although

this is only based on two projects.24


Figure II-1. Number of sustainable development claims by indicator

Economic Direct/indirect �nancial bene�t for the local and/or regional economy

Local/regional jobs generated directly/indirectly

Development/diffusion of local/imported technology

Investment in the local/regional infrastructure

170

516

197

79

108

374

151

258

245

9

9

52

10

0 100 200 300 400 500 600

41

3

Environment Efficient utilization of natural resources

Reduction in noise, odours, dust or pollutants

Improvement and/or protection of natural resources

Available utilities

Promotion of renewable energy

Social Labour conditions and/or human rights

Promotion of education

Health and safety

Poverty alleviation

Engagement of local population

Empowerment of women, care of children and frail

13


Furthermore a project could promise to provide benefits in

one or two areas and do so really well, while another

project could promise to provide many more benefits, but

provide none of them properly. This analysis is limited to

the PDD claims of how each project would benefit the host

country only. To assess how well (or how much) a project

contributes it would be necessary to score the project on

each indicator. Such scores should probably not be based

alone on the number or type of claims made in the PDDs.


Figure II-2. Sustainable development claims by UNFCCC project category as a percentage of the total claims for each criterion

24 Olsen and Fenhann, 2008, figure 3, p. 2827.








Available utilities




Health and safety

Poverty alleviation



0 10 20 30 40 50 60 70 80 90 100Percent

Afforestation and Reforestation

Biomass Energy

Methane Avoidance

Energy Efficiency

Flaring and SwitchEnergy

Industrial Gases

Mining and Others

Renewable Energy

Waste EnergyGases

14


2.6. sustainaBle development contriButions By host country

The distribution of sustainable development claims by host

country is shown in figure II-4 for the ten countries with

the most registered projects and for all other host

countries combined. Since these are countries with a

relatively large number of projects and also of a mix of

project types, it is not surprising that the projects they host

claim many sustainable development benefits. Projects in

each of the host countries, except Thailand and Vietnam,

together cite 11 or 12 of the 15 sustainable development

indicators. For Thailand and Vietnam the number is nine

of 15. Many indicators are mentioned many times. With

this diversity of claimed benefits, in only a few cases is an

indicator mentioned for more than 25 per cent of the

projects in a country 25: local/regional jobs generated

directly/indirectly for 30 per cent of the projects in China

and reduction in noise, odours, dust or pollutants for 27 per

cent of the projects in Indonesia and 26 per cent of the

projects in Malaysia. No indicator is prominent in the ten

largest CDM project host countries.


Figure II-3. Sustainable development claims by UNEP project type as a percentage of the total claims for each criterion





0




Available utilities




Health and safety

Poverty alleviation



10 20 30 40 50 60 70 80 90 100Percent

Afforestation

Biomass Energy

Cement

CO2 usage

Energy efficiency service

Energy efficiency supply side

Energy distribution

Fossil fuel switch

Fugitive

Geothermal

HFCs

Hydro

Land�ll gas

Methane avoidance

N2O

PFCs and SF6

Coal bed/mine methane

Energy efficiency households

Energy efficiency industry

Energy efficiency own generation

Reforestation Tidalfuel switch Transport WindSolar

15


2.7. trends in sustainaBle development contriButions

Figure II-5 shows the distribution of sustainable

development claims for projects by year of registration. The

only apparent trends are an increase in the percentage of

projects that claim “reduction in noise, odours, dust or

pollutants” and a reduction in the claims of efficient

utilization of natural resources. The percentage of projects

that claim to reduce noise, odours, dust or pollutants rises

from 12 per cent of the projects registered in 2005 to 21 per

cent of the projects registered during the first six months

of 2011. The number of projects that claim efficient

utilization of natural resources declines from 7 per cent of

the projects registered in 2007 to 1 per cent of the projects

registered during the first half of 2011. Reflecting the

number and diversity of projects registered each year, the

number of indicators mentioned varies between 11 and 14

per year after 2004.


25 All claims are weighted such that total claims for a project equals four. Therefore 25 per cent of claims means the same as 25 per cent of projects.

Figure II-4. Sustainable development claims as a percentage of the total claims by host country

Brazil

China

India

Indonesia

Republic of Korea

Malaysia

Mexico

Philippines

Thailand

Viet Nam

Others

0 10 20 30 40 50 60 70 80 90 100Percent

Direct/indirect �nancial bene�t for the local and/or regional economy




Efficient utilization of natural resources


Improvement and/or protection of natural resourceslocal/regional infrastructure


Labour conditions and/or human rights


Health and safety

Poverty alleviation


Available utilities

16


2.8. comparison of claims in product design documents and survey responses

The contributions to sustainable development are

expectations at the time the project is being validated.

The actual sustainable development contributions may

therefore change over time. Project participants were

asked to respond to the survey after the project had been

registered, so the survey responses may better reflect each

project’s actual contributions to sustainable development.

The survey attracted responses relating to the sustainable

development contributions of 392 projects of which 336

overlapped with the projects for which data were recorded

from PDDs.26 The survey responses were compared with

the indicators compiled from the PDDs.

Table II-2 shows the percentage of the survey response

indicators that match the indicators obtained from the

PDD for the same projects.27 For 19 per cent of the projects

none of the indicators from the PDD and the survey

responses match, which means 80 per cent have at least

one indicator in common. More over for 34 per cent of

the projects, half the indicators from the two sources

match each other and approximately 10 per cent of

projects match for more than half of the indicators. The

survey responses and the indicators from the PDD’s are

identical for two of the 336 projects.

The lack of perfect agreement may be due to differences in

judgment or interpretation concerning the applicable

indicator or changes to the project’s stated sustainable

development contributions. It was found that during the

collection of data from the PDDs, that on many occasions

statements were made that could have fallen into one or

another indicator category.


Figure II-5. Sustainable development claims as a percentage of the total claims by year of registration

Poverty alleviation


0 10 20 30 40 50 60 70 80 90 100

2004

2005

2006

2007

2008

2009

2010

2011

Percent

Direct/indirect �nancial bene�t for the local and/or regional economy




Efficient utilization of natural resources


Improvement and/or protection of natural resourceslocal/regional infrastructure


Labour conditions and/or human rights


Health and safety

Available utilities

17


The developer of a Gold Standard 28 project is required to

submit a sustainability monitoring plan in addition to the

sustainable development assessment in the PDD. The

monitoring plan is used to verify if the CDM project has

indeed contributed to sustainable development as

anticipated in the PDD. This may cause the project

developer to consider the impacts of the project carefully.29

It may also create an incentive to keep the PDD analysis

brief to minimize the monitoring requirements. The

survey responses in table II-2 include responses in relation

to 19 Gold Standard projects. The Gold Standard projects

have approximately the same number of sustainable

development indicators as regular CDM projects and the

match between the survey and PDD indicators is the same

as for regular CDM projects.30

2.9. other studies on sustainaBle development and the clean development mechanism

Since the Kyoto Protocol entered into force in early 2005,

the CDM has been the subject of extensive commentary

and research in the academic literature.

Olsen (2007) reviews 19 studies that focus on sustainable

development aspects of the CDM available as at June 2005.

None of the studies assessed registered CDM projects,

although some analysed projects similar to CDM projects.

Olsen concludes that, at the time, a consensus was

emerging that the CDM produces low-cost emission

reductions at the expense of achieving sustainable

development benefits.

type of match between survey and project design

documents (pdd) indicators Percentage match Number of projects Percentage of projects

No match between survey and PDD indicators 0 65 19

1 in 4 matches between survey and PDD indicators 25 99 29


1 in 2 or 2 in 4 matches between survey and PDD

indicators

50 113 34



Perfect match between survey and PDD indicators 100 2 1

Total 336 100

Table II-2. Comparison of sustainable development indicators from project design documents and survey responses


26 Approximately 7 per cent of the projects (29) were assessed by up to four different respondents, who provided slightly different assessments of the contribution of the same project to sustainable development.

27 For the 29 projects with multiple survey responses, an average response was calculated and used for the comparison.

28 See <http://www.cdmgoldstandard.org/>

29 Sterk et al., 2009, p. 16.

30 The data for Gold Standard projects are not reported separately here.

18


Sutter and Parreño (2007) apply multi-attribute utility

theory 31 to assess the sustainable development contribution

of the first 16 registered CDM projects.32 Each project is

scored on three equally weighted criteria – employment

generation, distribution of returns from the sale of CERs,

and improved local air quality – to get an overall score for

its contribution to sustainable development. Also the

additionality of each project is measured by the effect of

the revenue from the sale of CERs on the project’s

profitability; the larger the increase the greater the

additionality of the project.

Projects are then categorized as making a large or small

contribution to sustainable development and having low

or high additionality. Sutter and Parreño find no projects

that make a large contribution to sustainable development

and are highly additional.33 Most of the emission

reductions (over 95 per cent) come from HFC and landfill

gas projects that are highly additional but make a small

contribution to sustainable development. They conclude

that the first 16 registered CDM projects may be far from

delivering their claims to promote sustainable

development although this conclusion could change with

different indicators and weights.34

In response to concerns about the sustainable development

contribution of CDM projects, several initiatives, including

the Gold Standard and the Community Development

Carbon Fund (CDCF) 35 were launched to support projects

that meet specific sustainable development criteria. The

Gold Standard label rewards best-practice CDM projects

while the CDCF focuses on promoting CDM activities in

underprivileged communities. Nussbaumer (2009) uses

multi-criteria analysis to compare the sustainable

development contributions of Gold Standard, CDCF and

regular CDM projects. He applies 12 sustainable

development criteria to 39 projects in 10 categories located

in 12 countries.36

Nussbaumer finds that the sustainable development profiles

of Gold Standard and CDCF projects tend to be comparable

with or slightly more ample than similar regular projects.37

The Gold Standard and CDCF projects perform better with

respect to social criteria while regular CDM projects

perform better on economic criteria. Overall Nussbaumer

states that “labeled projects do not drastically outperform

non-labeled ones”, however the differences in the

sustainable development performance of comparable

categories of projects might be within the range of

uncertainty intrinsic to such assessments.

Alexeew et al. (2010) apply a methodology similar to that

used by Sutter and Parreño (2007) to assess the contribution

to sustainable development and the additionality of 40

registered projects in India.38 Contribution to sustainable

development is assessed using 11 criteria – four social, four

economic and three environmental. A project received a

score between –1 and +1 for each criterion. The scores are

summed – the criteria are weighted equally – to get an

overall score for each project. Additionality is measured by

the impact of the revenue from the sale of CERs on the

project’s profitability.

The sustainable development scores for individual projects

range between 2 and 5.6 out of a possible range of –11 to

+11. The values for each dimension of sustainability differ

significantly across project types. Wind, hydro and

biomass projects provide a relatively high number of

sustainable development benefits. Energy efficiency and

particularly HFC-23 projects are not as sustainable as the

other kinds of projects.39 Projects are categorized as

making a large or small contribution to sustainable

development and having low or high additionality. None

of the projects both make a large contribution to

sustainable development and have high additionality.40


19


In a recent detailed study of 10 CDM projects Boyd et. al.

(2009) found that it can be misleading to assess project’s

sustainable development outcomes only through the

project the documentation as local conditions change or

are not declared due owing to either a lack of

understanding of possible contributions or by intentional

omission of critical views and opinions.41

In summary, it should be noted that, despite the lack of

precision in the definition and understanding of

sustainable development, the occurrence of certain claims,

in the PDD’s and survey responses, that include

environmental and social considerations (such as efficient

utilization of natural resources, the reduction in noise,

odours, dust or pollutants, the improvement and/or

protection of natural resources, clean and available

utilities, the promotion of renewable energy, health and

safety) are almost always solely attributed by the

participants to the CDM project and would not have

occurred in its absence. This indicates that the CDM may

indeed contribute to assisting developing countries in

sustainable development.

This study shows that most CDM projects claim several

sustainable development benefits, the most prominent

being employment creation. The host country may have

an effect on the mix of benefits claimed however the

diversity of claims makes this difficult to ascertain. Similarly

different types of projects claim high numbers of benefits.

Apart from reduction of noise and pollution the type of

claim has not changed significantly since the first CDM

project was registered. The multitude of claims and relative

accuracy of claims made, as verified by a survey, provides

evidence to suggest that CDM projects may be making

some contribution to sustainable development in the host

country. However, there is much room for improvement in

the approaches used for both the declaration and the

assessment of sustainable development of CDM projects.

31 CDM projects are assessed with respect to multiple attributes (indicators), and the scores are weighted and aggregated to arrive at an overall assessment.

32 The 16 projects cover seven project types – six hydro projects, three landfill gas projects, two biomass projects, two HFC-23 destruction projects and 1 project each for residential energy efficiency, fossil fuel switch and wind – in nine host countries.

33 The paper includes conflicting information on this conclusion. Figure 3 and the text (p. 87) indicate there are no projects with a high rating for both additionality and sustainable development. But Table 17 reports that 2 projects accounting for 0.1 per cent of the projected emission reductions for the 16 projects have both high additionality and a high contribution to sustainable development.

34 Sutter and Parreño, 2007, p. 89.

35 See < http://wbcarbonfinance.org/>

36 The 12 sustainable development criteria consist of four each for the social, economic and environmental dimensions. The criteria are not aggregated or weighted. The project categories are: biogas (thermal): (four projects); industrial energy efficiency: (six); landfill gas: (three); biomass: (three); biogas (electricity generation): (three); building energy efficiency: (three); hydro (run of river): (six); hydro (new dam): (three); wind: (six) and solar cooking: (two). Ten of the projects are CDCF, six are Gold Standard and 23 are regular CDM projects. Seventeen projects are located in India, eight in China, two each in Argentina, Honduras, Republic of Moldova and Nepal, and one each in Chile, Indonesia, Mexico, Panama, Peru and South Africa.

37 Nussbaumer, 2009, p. 99.

38 The 40 projects are a sample of the 379 that had been registered by 31 December 2008. They include 15 biomass, 12 wind, seven hydro, four energy efficiency and two HFC-23 destruction projects. Nine are regular CDM projects and 31 are small scale-projects.

39 Alexeew et al., 2010, p. 12.

40 Alexeew et al., 2010, figure 4, p. 11. This is consistent with Sutter and Parreño (2007). Unlike Sutter and Parreño, Alexeew et al. find that most projects make a large sustainable development contribution. That may be due to the project mix. Alexeew et al. (2010) assess 15 biomass and seven hydro projects (out of 40); project types that Sutter and Parreño also find to make a large contribution to sustainable development.

41 This is consistent with the comparison of sustainable development indicators compiled from PDDs and those from survey responses for the same project discussed in section 2.9 above.


20



21


The transfer of technology is considered an important

benefit to assist developing countries in achieving

sustainable development. Some host countries specifically

detail it as a requirement for approval of a project. As

most GHG mitigation technologies are researched and

designed in developed countries,42 to reduce emissions in

developing countries the technologies need to be

transferred to those countries.43 The CDM is one

mechanism by which they could be transferred. Other

mechanisms for transfer of technology include licensing,

foreign direct investment, trade and, more recently,

establishment of global research and development

networks, acquisition of firms in developed countries, and

recruitment by firms in developing countries of experts

from developed countries.

3.1. definition of technology transfer

Similar to the broader concept of sustainable development,

there is no universally accepted definition of technology

transfer.44 The Intergovernmental Panel on Climate Change

(IPCC) defines technology transfer as “a broad set of

processes covering the flows of know-how, experience and

equipment for mitigating and adapting to climate change

amongst different stakeholders such as governments,

private-sector entities, financial institutions, non-governmental

organizations (NGOs) and research/education institutions”.45

This definition covers every relevant flow of hardware,

software, information and knowledge between and within

countries, from developed to developing countries and

vice versa whether on purely commercial terms or on a

preferential basis. The IPCC acknowledges that “the

treatment of technology transfer in this report is much

broader than that in the UNFCCC or of any particular

Article of that Convention”.46 In particular, the Convention

and the CDM, as an international mechanism, focus on

international transfers of technology.

In the literature the relative importance of the transfer of

technological knowledge and equipment is an important

issue. The United Nations Conference on Trade and

Development (UNCTAD) excludes the mere sale or lease of

goods from technology transfer.47 Equipment that embodies

a technology new to a country must be accompanied by

transfer of sufficient knowledge to successfully install,

operate and maintain the equipment.

Given possible differences in the interpretation of the

meaning of technology transfer, the survey asked

respondents for their view on when an organization can

state it ‘has’ a technology.48 Overwhelmingly, 68 per cent

of respondents responded that it is when an organization

uses and has knowledge of the technology. Simply using a

technology (20 per cent) or having knowledge of a

technology (10 per cent) is not sufficient. Thus, the views

of the respondents are consistent with the literature.49

Whether technology transfer also requires that the recipient

country to be able to adapt the technology to local

conditions, to produce similar equipment domestically, or

to further develop the technology is debated in the literature.

Even technologies that are widely used often rely on

equipment manufactured in a relatively small number of

countries and technology development in even fewer

countries.50 Expecting every country to be a producer or

innovator for every technology is unrealistic.

iii. technology transfer via clean development mechanism projects

42 Johnstone, et al., 2010., and Sterk et al., 2009

43 The technologies may need to be adapted to developing countries’ conditions, and technologies may need to be developed to mitigate emissions from sources found predominantly in developing countries.

44 Popp, 2011, p. 136.

45 IPCC, 2000, p. 3.

46 IPCC, 2000, p. 3.

47 UNCTAD, 1985, chapter 1, paragraph 1.2.

48 To assist respondents the survey defines the terms as follows: technology – could include equipment, machinery, tools, techniques, crafts, systems or methods of organization; use – could include owning and/or operating equipment or processes that use the technology; and knowledge – could include shared or exclusive participation in patents, licences, training programmes, academic papers, etc. relating to the technology.

49 Foray, 2009; Lall, 1993; and Popp, 2011.

50 Virtually every country has the capacity to operate and maintain electricity generating equipment, but electricity generating equipment of any given type – coal, oil, natural gas, nuclear, hydro, wind, solar, geothermal, etc. – is manufactured by a relatively small number of countries and the development of the generating technology occurs in even fewer countries.

51 Johnstone, et al., 2010.

22


Technology transfer via clean development mechanism projects

At any time, international transfer of technology is unlikely

if the technology is already available in the recipient country.

Thus technology transfer via CDM projects is likely to be at

a relatively low level for mature technologies already widely

available in developing countries, such as hydroelectric

generation and cement production. Technology

development and transfer can happen quite quickly,51 so

technology transfer via CDM projects may change over

time.

3.2. technology transfer claims of clean development mechanism projects

Claims of technology transfer made by project participants

in the PDDs for 3232 projects registered as at 31 July 2011

have been tabulated and analysed.52 CDM project

participants are specifically requested in section A.4.3 of

the PDD to “include a description of how environmentally

safe and sound technology and know-how to be used is

transferred to the host Party(ies).”53 The CDM glossary of

terms does not define ‘technology transfer’.54

Each PDD is searched using a number of keywords to

ensure that all statements relating to technology transfer

are identified. The statements are tabulated under the

following claim categories of claims:

• The project is expected to use imported equipment;

• The project is expected to use imported knowledge;

• The project is expected to use imported equipment

and knowledge;

• It is stated that the project will not involve

technology transfer;

• There are no statements with respect to technology

transfer;

• Other statements relating to technology transfer.

It can be inferred from the statements in the PDDs that

project participants overwhelmingly interpret technology

transfer to mean the use of equipment and/or knowledge

not previously available in the host country by the CDM

project.55

Technology transfer related statements in the PDD reflect

expectations at the time the project is being validated.

The actual nature and frequency of technology transfer

may differ as discussed in section 3.6 below.

3.3. technology transfer By project type

Project characteristics and the frequency of technology

transfer – by number of projects and share of expected

annual emission reductions – are shown in figure III-6 and

table VII-10 in the annex to this document for UNEP project

types and in figure III-7 and table VII-11 in the annex to this

document for UNFCCC project categories.56 The PDDs of

21 per cent of the projects made no explicit statement

concerning technology transfer. Of the projects that claim,

or explicitly state that they do not involve, technology

transfer, 42 per cent of all projects representing 64 per cent

of the total estimated annual emission reductions claim

technology transfer.57

Not surprisingly, the distribution of technology transfer

claims by UNEP project type is similar to that in the study

conducted in 2010.58 The largest difference versus the 2010

study is for the energy efficiency (households) project type

where the percentages of projects claiming technology

transfer (64 per cent) and estimated associated emission

reductions (86 per cent) are substantially higher than the

corresponding figures in the 2010 study – 38 per cent and

58 per cent, respectively. This may be due to the smaller

number of projects (26) in this study versus a slightly

higher number (32) in the 2010 study (see table IV-6).

As expected, the rate of technology transfer is lowest for

hydro and cement type projects, which are mature

technologies that are widely available in developing

countries.

For the UNFCCC project categories (see table VII-11 in the

annex to this document and figure III-7), the highest rates

of technology transfer are claimed for industrial gases

(over 90 per cent) and methane avoidance (about 85 per

cent) projects. The lowest rates of technology transfer are

claimed for biomass energy (about 35 per cent) and

renewable energy (just over 20 per cent) projects.

23



51 Johnstone, et al., 2010.

52 In total, 44 of the 3,276 projects registered as at 31 July, 2011 could not be assessed with respect to technology transfer.

53 UNFCCC, 2008, p. 8.

54 UNFCCC, 2009

55 A small number of projects claim transfer of technology within the host country. These projects are assessed as not involving (international) technology transfer.

56 The project characteristics are based on the 3,276 registered projects, while the technology transfer percentages cover the 3,232 projects for which technology transfer information was tabulated.

57 UNFCCC, 2010, table IV-6, p. 32 shows corresponding figures of 40 per cent and 59 per cent respectively for 4,984 projects in the pipeline (registered or under validation) as of 30 June 2010. Virtually all of the 3,276 projects covered in the table VII-11 in the annex to this document are covered by the 2010 study.

58 UNFCCC, 2010, table IV-6, p. 32.

Figure III-6. Technology transfer by UNEP project type as a percentage of total registered projects

Percent

No technology transfer Technology transfer Technology transfer unknown

Afforestation

Biomass energy

Cement

CO2 usage


Energy efficiency households



Energy efficiency service


Energy distribution

Fossil fuel switch

Fugitive

Geothermal

HFCs

Hydro

Land�ll gas

Methane avoidance

N2O

PFCs and SF6

Reforestation

Solar

Tidal

Transport

Wind

0 10 20 30 40 50 60 70 80 90 100

24



3.4. technology transfer By host country

The rate of technology transfer by host country is presented

in table III-3 for the 10 host countries with the most projects.

The results are similar to those reported in the 2010 study.59

This is not surprising since virtually all of the 3,232 projects

covered in table III-3 are covered by the 2010 study

together with other projects not registered by 31 July 2011.

The Philippines is one of the ten largest host countries

covered in table III-3, but when projects being validated

were included in the 2010 study it was replaced by Chile.

Figure III-7. Technology transfer by UNFCCC project categories as a percentage of total registered projects

Country Number of projects

Estimated emission reductions (CO2 eq/year)

Average project size (CO2 eq/year)

Technology transfer claims Percentage of projects where technology transfer could not be determinedNumber of projects

Annual emission reductions

Brazil 195 23,081,763 118,368 35 % 64 % 26 %

China 1,468 311,566,074 212,238 20 % 52 % 9 %

India 694 52,996,395 76,364 16 % 42 % 37 %

Indonesia 70 7,532,212 107,603 62 % 49 % 35 %

Republic of Korea 61 18,724,386 306,957 53 % 77 % 37 %

Malaysia 93 5,419,865 58,278 59 % 67 % 34 %

Mexico 129 10,556,788 81,836 91 % 90 % 9 %

Philippines 54 2,104,988 38,981 59 % 68 % 17 %

Thailand 53 3,104,655 58,578 83 % 86 % 17 %

Viet Nam 64 3,385,143 52,893 74 % 46 % 21 %

All other countries 395 54,475,399 137,912 62 % 66 % 31 %

Total 3,276 492,947,668 150,472 33 % 55 % 21 %

Table III-3. Technology transfer for registered projects in selected host countries

Percent

No technology transfer Technology transfer Technology transfer unknown

0 10 20 30 40 50 60 70 80 90 100

Afforestation and reforestation

Biomass Energy

Methane Avoidance

Energy Efficiency

Flaring and Fuel Switch

Industrial Gases

Mining and Others

Renewable Energy

Waste Energy

25



3.5. trend in technology transfer

The rate of technology transfer has declined over the life

of the CDM as shown in figure III-8.60 The decline has been

steeper than the overall average in Brazil, China and

India.61 Initially, China had a rate of technology transfer

higher than the average for all countries, but the rate is

now substantially lower. India has consistently had a rate

of technology transfer lower than the average for all

countries. The rate of technology transfer for other host

countries has been much higher than the overall average

and has declined only slightly.

Several factors contribute to these results. First, as more

projects of a given type are implemented in a country, the

rate of new technology transfer declines, since local

technology access has been created through previous

projects. Second, the transfer of technologies used by CDM

projects appears to have been happening through other

channels as well, for example via licensing, foreign direct

investment, R&D networks, merges, acquisitions and the

recruitment of foreign experts.62 Finally, changes in the

mix of registered projects may affect the rate of technology

transfer since each project type has a different frequency

of technology transfer.

Over time, the need for technology transfer falls as local

sources of knowledge and equipment become more

available and expertise in the technologies grows. This

reflects the contribution made by the CDM to a developing

country and the increasing maturity in the countries use

of the CDM as the need for the further inflow of technology

is reduced. Nevertheless, the vast majority of developing

countries involved in the CDM currently remain at the

stage at which substantial levels of technology transfer still

need to be, and are being, received.

Figure III-8. Trends in technology transfer claims by host country

59 UNFCCC, 2010, table IV-4, p. 22.

60 The data in figure III-8 are by number of projects and by the year in which a project is registered. The decline is larger when measured in terms of estimated annual emission reductions.

61 The number of projects where technology transfer is known, but are too few for Brazil in 2009 and 2010, and for China and India in 2004, are not shown in figure III-8.

62 Hascic and Johnstone, 2009; Lema and Lema, 2010.

All countries Brazil OthersChina India

0Percentage of projects with known technology transfer

10

20

30

40

50

60

70

80

90

100

2004 2005 2006 2007 2008 2009 2010

26


3.6. comparison of claims in project design documents and survey responses

The technology transfer claims from the PDDs are compared

with the survey responses for the same projects in table III-4.

The survey responses indicate that 57 per cent of the 110

projects that stated that they do not expect technology

transfer did not involve technology transfer.63 Of the 89

projects that made no statement about technology transfer,

75 per cent involved some form of technology transfer.

Of the 175 projects whose PDD stated that some form of

technology transfer was anticipated, 152 (87 per cent)

actually involved technology transfer.64 Transfer of both

equipment and knowledge was more common than

anticipated in the PDDs.65

These results are quite similar to those reported from an

earlier survey reported in the 2010 study.66 That survey

found that a claim of “no technology transfer” claim in a

project’s PDD was correct 88 per cent of the time (57 per

cent in table III-4). Projects that expected some form of

technology transfer actually involved technology transfer

89 per cent of the time (87 per cent in table III-4) and

transfer of both knowledge and equipment was more

frequent than expected. A total of 58 per cent of the

projects that did not mention technology transfer in their

PDD involved technology transfer (75 per cent in table III-4).

The two surveys confirm the basic accuracy of the

technology transfer claims made in the PDDs.

PDD claimsSpecifically states no transfer Unknown

Transfer of equipment only

Transfer of knowledge only

Transfer of equipment and knowledge Total

Specifically states no transfer 57 % 5 % 9 % 7 % 21 % 110

Unknown 21 % 3 % 24 % 11 % 40 % 89

Transfer of equipment only 7 % 2 % 24 % 7 % 60 % 45

Transfer of knowledge only 11 % 0 % 11 % 15 % 63 % 27

Transfer of equipment and knowledge 13 % 3 % 13 % 2 % 70 % 103

Table III-4. Comparison of technology transfer (TT) claims in the project design documents versus survey responses


27


3.7. other studies on technology transfer and the clean development mechanism

Several papers have analysed technology transfer by CDM

projects for registered projects (de Coninck et al. 2007;

Dechezleprêtre et al. 2008; and Das 2011) or projects in

the pipeline (Haites et al. 2006; Seres et al., 2009; UNFCCC,

2007, 2008 and 2010; and Haites et al. 2012) using

information from PDDs.67 All of these papers find that a

substantial share of the CDM projects claim technology

transfer. The frequency of technology transfer varies with

the project characteristics, including project type, and the

host country.

Results from the most recent and most comprehensive

analysis (Haites et al., 2012) indicate that:

• The frequency of technology transfer differs

significantly by project type;

• Larger projects are more likely to involve technology

transfer;

• Small-scale projects are less likely to involve

technology transfer;

• The host country has a significant influence on the

rate of technology transfer;

• Technology transfer falls as the number of projects

of the same type in a host country increases; and

• Technology transfer was more common during the

early years of the CDM and has become less frequent

since 2008.

A host country with a larger population, higher tariffs,

more ODA per capita, a higher percentage of renewable

energy generation, a higher ranking for the ease of doing

business, a higher score on the democracy index and a

greater technological capacity (as measured by discounted

stock of patent applications) is likely to have a lower rate of

technology transfer for CDM projects. Changes in these

country characteristics affect the rate of technology

transfer in CDM projects with different time lags. Most of

the host country variables have a lag of only one or two

years, which suggests that their effect on the rate of

technology transfer is relatively quick.

Hascic and Johnstone (2009) study international transfer of

wind technology from 1988 through 2007 and conclude

that the CDM has had an influence on the extent of

transfer between developed and developing countries, but

that this effect is relatively small compared with other

factors. Das (2011) concludes that the contribution of the

CDM to technology transfer can at best be regarded as

minimal. This is apparently based on an expectation that

every project should involve technology transfer.68 In

almost all projects that involve technology transfer, she

finds that the technological learning and capability-

building are restricted to the level of operation and

maintenance of an imported technology.

This study has shown there to be little overall difference in

the levels of claimed technology transfer for registered

projects for both types of projects and host countries. The

claims in the PDD’s are also as accurate as have been

shown in the past. Industrial gas projects tend to claim

the highest and biomass and renewable energy projects

the lowest levels of technology transfer. As indicated in

other studies too, the rates of technology transfer over

time show that the need for technology transfer falls as

local sources of knowledge and equipment become more

available, and expertise in available technologies grows.

However there are many developing countries, also

involved in the CDM, who could still benefit from

technology transfer through the CDM or other channels.

63 24 per cent + 11 per cent + 40 per cent = 75 per cent

64 Transfer of equipment only (45), transfer of knowledge only (27) and transfer of equipment and knowledge (103).

65 60 per cent for transfer of equipment only and 63 % for transfer of knowledge only. The total number that involved both knowledge and equipment transfer was 116, compared with the 103 based on the PDD information.

66 UNFCCC, 2010, Table A-8, p. 37.

67 A statistical test indicates that registered projects and projects in the pipeline that have not yet been registered are similar in terms of technology transfer and can be grouped together for analysis. (UNFCCC, 2010, Annex B).

68 The conclusion is supported by the statement that “out of 1000 projects studied, only 265 involve technology transfer.”


28



29


4.1. investment triggered By clean development mechanism projects

Many CDM projects declare financial information relating

to the proposed project activity using a set of tools offered

by the CDM Executive Board as a way to demonstrate

additionality.69 The PDDs, support documents and appendices

for 1,407 projects were analysed to gather data on the

financials of CDM projects registered as at 31 July 2011.

The information gathered per project included:

• Capital investment;

• Average annual operational costs;

• Average annual income (non-CER sources);

• Sources of income (description);

• Expected operating lifetime;

• Discount rate;

• Financial benchmark.

The cost information collected was used to calculate the

cost per tonne of GHG gas emissions reduced by project

type, which varied widely by project type.70 The appropriate

cost per tonne was then used to estimate the cost of

projects that did not provide this information in the PDD.

iv. investments in and costs of clean development mechanism projects

69 See <https://cdm.unfccc.int/Reference/tools/index.html>.

70 UNEP project types and subtypes are used to provide as many different project types as possible and so capture the diversity in the cost by project type.

Figure IV-9. Investment in clean development mechanism projects by year (USD billion)

No. of projects (issuance) No. of projects (registered) Annual investment (issuance) Annual investment (registered)

2005 2006 2007 2008 2009 2010

0Investment (Billion USD)

Number of projects (Hundreds)

5,0

10,0

15,0

20,0

25,0

30,0

0

1

35,0

40,0

45,0

50,0

2

3

4

5

6

7

8

9

2004

30


Investments in and costs of Clean Development Mechanism projects

Figure IV-9 shows the estimated capital investment for all

registered projects in each year of registration to the end

of 2010. For projects registered late in the year, much of

the investment likely occurs during the following year.

Since the investment rises over time, the amount for a

given year probably overstates the investment actually

made during the year. As some projects may be delayed or

never be implemented, figure IV-9 also shows the estimated

investment by year for projects, which have either

requested issuance or have been issued CERs (collectively

shown as issuance) – projects that are certain to have been

implemented. Since it is not absolutely certain that a

registered CDM project is eventually implemented and as

issuance projects are conservative proxies for implemented

projects, the true investment per year lies somewhere

between the two curves shown in figure IV-9.

The estimated investment in registered projects rose from

USD 40 million in 2004 to USD 47 billion in 2010, totalling

over USD 140 billion to mid 2011 (see table VII-12 in the

annex to this document). The estimated investment in

registered projects, which have requested issuance or have

CERs issued (issuance) rose from USD 40 million in 2004 to

almost USD 24 billion in 2009, totalling over USD 81 billion

to mid 2011.

The apparent decline in investment and in the number of

projects that have requested issuance or have been issued

CERs (issuance) in 2010 is due mainly to the time lag

between registration of the project and the first request for

issuance of CERs. Typically several months are required

before issuance can take place after a project is registered,

implemented and has operated for some time. Emission

reductions need to be independently verified by a DOE

which takes time, and projects request issuance based on

the economic or contractual need and not at predefined

intervals. Therefore, it is likely that more projects have

been implemented and more investment has taken place

in 2010, than is shown in figure IV-9.

The cumulative estimated investment by region up to mid

2011 as presented in table IV-5, shows that the average

investment is approximately USD 45 million per project.

Over 75 per cent of all projects in the Asia-Pacific region

have an average investment about 15 per cent higher than

the global average. The higher average in this region

could be due to a larger average project size or a

combination of larger and more capital intensive projects.

In all other regions, the average investment is generally

less than half of the global average.

The estimated investment by host country is provided in

table VII-12 in the annex to this document. About one

quarter of the host countries, including countries in each

region, have projects with an average investment higher

than the global average. The differences in the average

investment are due, at least in part, to differences in the

mix of projects implemented in host countries, both in

terms of the type of project such as a capital intensive

hydro projects and or the overall project size.

Number of projects Total investment Average investment

Registered Issuance Registered Issuance Registered Issuance

Africa 69 31 2,369 1,031 34 33

Asia and the Pacific 2,653 1,453 127,763 74,466 48 51

Economies in transition 13 5 144 74 11 15

Latin America and the Caribbean 541 344 11,458 5,957 21 17

Total 3,276 1,833 141,734 81,529 43 44

Table IV-5. Estimated investment in clean development mechanism projects by region (USD million)

31



4.2. cost of emission reductions

From information contained in PDDs, it is possible to

estimate the mitigation cost by category or type of project.

Essentially, this is the total cost of the project including

initial outlay of capital and the annual net operational

expenditures per CER expected for each type. From a

project developer’s standpoint, this mitigation cost should

be below the expected CER price in order to make the

project viable. As shown in the equation below, a project’s

mitigation cost is defined as the net present value 71 of its

annual operations costs less its non-CDM related revenues

(e.g. income from electricity sales for wind projects), plus

the capital expenditures, all divided by the amount of GHG

emission reductions it expects to achieve over its crediting

period.72

Where:

• C(CDM)i is the abatement cost of project i (in USD/t

CO2 eq);

• t is the time period (in years);

• cp is the length of its crediting period(s) (10 or 21

years);

• Ct is the operation costs in year t (in USD);

• Rt is the non-carbon revenues in year t (in USD);

• I0 is the initial investment (in USD);

• At is the abatement achieved by the project in year t

(in t CO2 eq);

• r is the discount rate.

All costs are expressed in USD, calculated using the current

interbank exchange rate at the date the project started

operations or was submitted for validation. The discount

rate was the rate used to demonstrate additionality and is

typically expressed as a discount rate, benchmark rate or

hurdle rate. Where a rate was not disclosed, a country

average was applied. Castro (2010) uses a median discount

rate by country to normalize abatement costs, as the rate

can vary significantly from one project to another within a

single host country and this, in turn, could lead to less

reliable abatement cost estimates. However, this study did

not find that to be the case.73

In terms of the time period the crediting period was

chosen over the operational lifetime of the project. For

many projects, project developers tend to consider a

lifetime equal to its crediting period, even if the project

has a longer life. More than 60 per cent of all CDM

projects choose a renewable seven-year crediting period for

a maximum of 21 years and the remainder choose a single

crediting period, usually 10 years. Some projects used

shorter crediting periods, while others, especially hydro

projects, typically have a much longer operational lifetime.

For the calculation of costs, the time period that most

likely informed the investment decision by the project

developer was chosen – the CDM crediting period.

Abatement costs were calculated for all projects that

included data for capital and operational expenditures,

and non-carbon revenues. For some projects either the

revenue or the operational costs were not available. This

reduced the number of projects to 1,014. Out of these 640

have a 21-year crediting period and 374 projects have a

10-year crediting period. Owing to the significant

differences between these two periods, the abatement

costs by UNFCCC project category and UNEP project type

are provided in tables IV-6 and IV-7 by crediting period.

71 As interest rates are generally positive, the net present value is the standard method used in order to discount future costs and benefits to current values.

72 Castro, 2010, p. 12.

73 Abatement costs were calculated using both a country standard discount rate and the discount rates from individual PDDs and no significant differences were found.

32


UNFCCC project categories

21-year crediting period 10-year crediting period Total

Number of projects

Average (USD/t CO2 eq)

Standard deviation (USD/t CO2 eq)

Number of projects



Number of projects

Afforestation and Reforestation 2 3 2

Biomass Energy 49 - 1 8 20 - 3 23 69

Methane Avoidance 115 2 3 101 4 5 216

Energy Efficiency 11 1 3 10 23 23 21

Flaring and Fuel Switch 2 5 7 10 - 2 42 12

Industrial Gases 13 1 8 4 12 21

Mining and Others 20 4 15 26 1 2 46

Renewable Energy 423 7 49 163 49 133 586

Waste Energy 5 - 1 2 36 7 19 41

Total 640 5 40 374 24 91 1,014

UNEP project types

21-year crediting period 10-year crediting period Total

Number of projects



Number of projects



Number of projects

Biomass energy 65 - 3 11 39 - 12 23 104

Cement 1 5 3 3 2 4

Coal bed/mine methane 18 1 25 1 2 43

Energy efficiency industry 4 10 10 4

Energy efficiency own generation 5 - 1 2 33 7 20 38

Energy efficiency supply side 3 4 4 4 28 25 7

Energy distribution 1 - 3 1 3 2

Fossil fuel switch 8 2 7 8 58 15

Fugitive 1 4 5 5 5

Geothermal 4 - 2 5 4

Hydro 230 2 8 48 15 41 278

Landfill gas 50 2 3 40 4 4 90

Methane avoidance 60 2 3 58 4 6 118

N2O 12 1 12

PFCs and SF6 7 8 7

Reforestation 2 3 2

Tidal 1 5 1

Transport 1 67 1

Wind 170 3 7 91 29 14 261

Total (excluding Solar) 632 2 8 364 10 24 996

Solar 8 280 227 10 509 229 18

Total 640 5 40 374 24 91 1,014

Table IV-6. Abatement costs by UNFCCC project category (USD/t CO2 eq)

Table IV-7. Abatement costs by UNEP project type (USD/t CO2 eq)


33


The average abatement cost for all registered projects with

a 21-year crediting period is USD 5/t CO2 eq. Excluding

solar projects, as they are substantially more costly than

other types of project, the average project abatement cost

falls to USD 2/t CO2 eq. This is consistent with the findings

of Castro (2010) who calculates the mitigation cost for 29

technologies using data from 252 registered projects in

eight countries.74 Twenty-two of the project types have a

mitigation cost of USD 5/t CO2 eq or less.75 The average

abatement cost for all registered projects with a 10-year

crediting period is USD 24/t CO2 eq, and USD 10/t CO2 eq

without solar projects.

There is substantially more variance in the abatement costs

for projects with a 10-year crediting period relative to

those with a 21-year crediting period as shown by the

higher standard deviations for 10-year crediting period

projects. Excluding solar projects, the standard deviation

is USD 8/t CO2 eq for projects with a 21-year crediting

period. This means that most projects have an abatement

cost of USD 2/t CO2 eq plus or minus USD 8/t CO2 eq, or in

other words, abatement costs are between USD –6 and USD

10/t CO2 eq.

Similarly, for projects with a 10-year crediting period, the

standard deviation is USD 24/t CO2 eq such that abatement

costs are between USD –14 and USD 34/t CO2 eq. This is

due mainly to a smaller denominator in the abatement

cost equation for this group. That is, project costs which

would presumably be the same as for their 21-year crediting

period counterparts are normalized by a much lower

amount of emission reductions (over 10 rather than 21-years).

This leads to a higher abatement cost and more volatility

in its estimation.

This is also shown in figures IV-10 and IV-11 where the

boxes illustrate the average abatement cost, give or take

one standard deviation, and the horizontal lines provide

the highest and lowest abatement costs.76

How can an abatement cost be negative? If the non-carbon

revenue over the life of a project is greater than the capital

and operational expenditures, its abatement cost will be

below zero. It is evident from figures IV-10 and IV-11 that

there are a number of projects that are profitable without

CDM revenue. However, the profits may be below a

benchmark that accounts for the risks involved or there

may be other barriers impeding the project. Therefore,

a negative abatement cost does not automatically imply

that the project is not meeting criteria for additionality.

It should be noted that there could be a negative abatement

cost bias for all biomass energy projects. Biomass energy

projects typically involve converting biomass residues to

energy for own use or for resale. For these projects, it was

not always evident in the documentation if the biomass

residues were purchased or if they were the residues of

another process. If the project developer purchases the

biomass, it is not always clear if this cost has been included

as part of the operational costs of the project. It is likely

that some of these costs have not been recorded, which

would cause biomass projects to appear to be more profitable

than they actually are. This is shown in figures IV-10 and

IV-11, where the bulk of abatement costs for biomass

energy projects are negative. This issue is not likely for

other types of projects shown in this study.

In summary, the fact that some participants choose a

shorter crediting period that can result in costs that are

higher per expected emission reduction than the price of a

CER, and the presence of very costly solar projects, especially

those using photovoltaic technology, suggests that the

primary motivation for the implementation of these

projects is not the CDM. This is not to say that they would

have been implemented without revenues from CERs, it is

simply that, while some CDM projects with very low

abatement costs have obvious financial benefits, which is

enough incentive for the projects to take place, others

seem less obvious. Implementation of these projects may

be motivated by other reasons such as to help fund

research into renewable technologies that potentially have

a lower abatement cost in the long run.

74 Castro, 2010. The categories used were UNEP project types and sub-types. The eight countries are Argentina, China, Israel, Malaysia, Mexico, Republic of Korea, South Africa and Thailand. The mitigation cost for HFC-23 destruction projects was estimated from published sources, as none of these projects included sufficient financial information to calculate their costs.

75 Castro, 2010, figure II-2, p. 13.

76 The data for UNEP project types Afforestation, CO2 usage, Energy efficiency household, Energy efficiency service, and HFCs was insufficient for the calculation of abatement cost and so were excluded from figures IV-10 and IV-11, and table IV-7.


34


Figure IV-10. Abatement costs of UNEP project types with a 21-year crediting period

Figure IV-11. Abatement costs of UNEP project types with a 10-year crediting period

USD/t CO2 eq

standard deviation averageminimum, maximum

-20.0-40.0 0 20.0 40.0 60.0 80.0 100.0 720.0700.0680.0

Biomass energy

Cement




Energy distribution

Fossil fuel switch

Fugitive

Geothermal

Hydro

Land�ll gas

Methane avoidance

N2O

Reforestation

Tidal

Wind

Transport

Solar photovoltaic

USD/t CO2 eq

standard deviation averageminimum, maximum

-100.0-150.0 -50.00 0 50.0 100.0 150.0 200.0 1000.0950.0900.0

Biomass energy

Cement





Energy distribution

Fossil fuel switch

Fugitive

Hydro

Land�ll gas

Methane avoidance

PFCs and SF6

Wind

Solar photovoltaic


35


4.3. other studies on costs of the clean development mechanism

Financial data from the PDDs for 840 projects submitted

for validation during 2003-2008 are used by Rahman et al.

(2009) to estimate mitigation costs for 10 project types –

biogas; biomass; hydro; wind; geothermal; hydrofluorocarbon,

perfluorocarbon and nitrous oxide reduction; methane

reduction, coal bed/mine and cement; supply-side energy

efficiency; demand-side energy efficiency; and fossil fuel

switch. The estimated marginal cost curves suggest

economies of scale in emission abatement and cost

differences by project type.77 In particular, nitrogen and

methane gas reduction projects are characterized by much

lower marginal costs relative to wind or biomass projects.78

The authors conclude that investors focus on projects with

low mitigation costs, so the CDM market is operating

efficiently and sending the right signals to the investors.79

Castro (2010) uses the mitigation costs to analyse whether

CDM projects are capturing most of the low-cost emission

reductions – the ‘low-hanging fruit’ – in the host countries.

That might raise the cost to those countries of meeting

possible future mitigation targets.80 She uses the mitigation

costs and the projected annual emission reductions for all

CDM projects proposed as at October 2009 to develop a

marginal abatement cost (MAC) curve for nine countries

(Argentina, China, Indonesia, Israel, Malaysia, Mexico,

Thailand, South Africa and South Korea). The MAC curve

ranks the project types in order of increasing cost and

shows the estimated annual emission reductions for each

type. With the lowest (often negative) cost option at the

origin, the MAC curve rises step-wise as one moves to the

right and adds progressively more costly project types.

The MAC curves show the potential emission reduction

that could be achieved for less than a specified cost per

t CO2 eq.

Castro compares her MAC curves for CDM projects with

MAC curves of all emission reduction options for the year

2010 for six of the nine countries above (excl. Indonesia,

Israel and Malaysia). She finds that the percentage of

abatement potential captured by the CDM projects ranges

from 1.8 per cent in South Africa to 30.9 per cent in China.81

On the basis of these results Castro concludes that there

are still plenty of low-cost opportunities available – the

low-hanging fruit argument is weak. In other words the

CDM is not capturing all of the identified abatement

potential in these countries.82

77 The marginal costs did not decrease over time. (Rahman et al., 2009, pp. 16 and 17).

78 Rahman, et al., 2009, p. 16.

79 Rahman, et al., 2009, p. 16.

80 Such an impact depends on the evolution of carbon credit prices, the way in which future abatement commitments for developing countries are set, whether CDM projects are developed unilaterally or bilaterally, the market power of the countries, and on the ability to bank credits from one commitment period to the next (Castro, 2010, pp. 8-9).

81 Castro, 2010, table 1, p. 22. The figures for the other countries are: Mexico 2.1 per cent; Thailand 8.8 per cent; Argentina 17.6 per cent and Republic of Korea 17.7 per cent.

82 Castro, 2010, p. 24.


36



37


This study has shown it is possible to make an initial

estimate of the claimed contribution of the CDM to

benefits for the host countries. These include a myriad

of possible sustainable development criteria that are

apparently being achieved at a project level, as well

significant levels of international transfer of technology

and know-how. It has also shown that it is possible to

ascertain the overall investment due to the CDM and

provide a basic cost estimate of CDM specific mitigation

technologies and actions. It does however pose new

questions and several areas for improvement.

Assessment of the sustainable development contribution of

CDM projects requires, as a starting point, a set of

indicators that can capture all of the benefits claimed in a

consistent fashion. The indicators used in this and earlier

studies do not fully meet this requirement. Further

analysis of the PDD claims and survey responses can help

identify indicators whose descriptions appear to be unclear.

A revised set of indicators could be developed, subjected to

expert review and public comment, and tested through a

survey. In addition, some ex post verification of PDD

claims and survey responses would likely need to be

conducted.

Technology transfer via the CDM has been extensively

analysed and been found to be a complex, dynamic

process. While surveys show that the PDD claims are

reasonably accurate, more ex-post data could improve the

analyses. More research on the relative contributions of

the CDM and other mechanisms to technology transfer

would also be useful.

The additionality of the emission reductions achieved by

CDM projects is critical for environmental integrity. A

CDM project can reduce GHG emissions in several ways:

(1) Project reductions during its crediting period;

(2) Project reductions after the end of the crediting

period;

(3) Increased adoption of the project’s climate friendly

technology in the host country due to increased

awareness and/or technology transfer; and

(4) Less emissions leakage from Parties included in

Annex B to the Kyoto Protocol, owing to reduced

compliance costs.

The CDM additionality tests focus only on the first category

of GHG emission reductions. The emission reductions in

the second category can be calculated from available data.

While some research is available on the emission reductions

in the latter two categories, more research is needed for

each category. There is not yet sufficient evidence to

conclude that the emission reductions, in the first category,

or overall, exceed the CERs issued for CDM projects.

One of the objectives of the CDM is to assist Annex I

Parties in complying with their emission limitation and

reduction commitments under the Kyoto Protocol. The

contribution of the CDM to this objective can be assessed

in terms of the projected use of CERs for compliance by

Annex I Parties and cost savings due to the use of CERs

relative to domestic emission reductions by Annex I Parties.

Some research on both of these topics is available, but

more would be useful to evaluate the performance of the

CDM with respect to this objective.

Some of the above improvements and further work will be

covered in future reports.

v. opportunities for improvement

38



39


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41


vii. annexes/taBles

Category Definition Clean development mechanism methodologies

Afforestation and Reforestation Afforestation and reforestation CO2 sink activities AR-AMS0001; AR-AM0001; AR-AM0002;

AR-AM0003; AR-AM0004; AR-AM0005;

AR-AM0010; AR-ACM0001

Biomass energy Heat and or power generation from biomass

residues of both renewable and non-renewable

biomass

AM0004; AM0015; AM0027; AM0036; ACM0002;

ACM0006; ACM0018; AMS-I.A.; AMS-I.C.;

AMS-I.D.; AMS-I.E.; AMS-I.F.; AMS-III.D.;

AMS-III.H.; AMS-III.Q.

Methane avoidance Methane avoidance/recovery, including heat

and/or power generation, excluding coal mine/

bed methane

AM0002; AM0003; AM0006; AM0010; AM0011;

AM0013; AM0016; AM0022; AM0025; AM0039;

ACM0010; ACM0014; AM0083; ACM0002;

AMS-III.Y.; ACM0001; AMS-I.A.; AMS-I.C.; AMS-I.D.;

AMS-III.I.; AMS-III.D.; AMS-III.E.; AMS-III.F.;

AMS-III.G.; AMS-III.H.; AMS-III.K.; AMS-III.O.;

AMS-III.R.

Energy efficiency Energy efficiency in all sectors and industries AM0014; AM0033; AM0029; AM0038; AM0046;

ACM0002; ACM0005; ACM0007; ACM0013;

AMS-I.C; AMS-I.D.; AMS-II.A.; AMS-II.B.; AMS-II.C.;

AMS-II.D., AMS-II.E.; AMS-II.G.; AMS-II.H.;

AMS-II.J.; AMS-III.B.; AMS-III.J.

Flaring and fuel switch Gas flaring and feed or fuel switch AM0009; ACM0003; ACM0009; ACM0011

AMS-III.B.

Industrial gases Industrial gases in all sectors and industries AM0001; AM0008; AM0018; AM0021; AM0023;

AM0028; AM0030; AM0034; AM0035; AM0041;

AM0045; AM0058; AM0059; AM0069; AM0078;

AM0079; ACM0004; AMS-III.AD; AMS-III.N.

Mining and others Mining and others such as transport,

construction etc.

AM0014; AM0031; AM0065; ACM0002; ACM0008;

AMS-III.C.; AMS-III.T.; AMS-III.U.

Renewable energy Renewable energy in all sectors and industries AM0005; AM0026; ACM0002; AMS-I.D.; AMS-I.F.

Waste energy Heat and/or power from waste energy such as

gas, heat and pressure

AM0024; AM0032; AM0037; AM0055; AM0066;

ACM0002; ACM0004; ACM0012 AMS-III.P.;

AMS-III.Q.

Table VII-8. Definitions of UNFCCC project categories and their associated methodologies or combinations thereof, applicable for the

projects analysed in this study.

42


Annexes/Tables

Project type Definition

Afforestation and reforestation According to land use, land-use change and forestry rules

Agriculture Irrigation, alternative fertilizers and rice crop methane avoidance

Methane avoidance Biogas from manure, waste water, industrial solid waste and palm oil solid waste, or methane

avoidance by composting or aerobic treatment

Biomass energy New plant using biomass or existing ones changing from fossil fuels to biomass; also biofuels

Cement Projects where lime in the cement is replaced by other materials, or neutralization with lime is

avoided

CO2 capture Recovered CO2 from tail gas substituting fossil fuels for production of CO2

Coal bed/mine methane CH4 is collected from coal mines or coal beds. This includes ventilation air methane (VAM)

Energy distribution Reduction in losses in transmission/distribution of electricity/district heat; country interconnection

Energy efficiency (EE) households Energy efficiency improvements in domestic houses and appliances

EE industry End-use energy efficiency improvements in industry

EE own generation Waste heat or waste gas used for electricity production in industry

EE service Energy efficiency improvements in buildings and appliances in public & private service

EE supply side More efficient power plants producing electricity and district heat, coal field fire extinguishing

Fossil fuel switch Switch from one fossil fuel to another fossil fuel (including new natural gas power plants)

Fugitive Recovery instead of flaring of CH4 from oil wells, gas pipeline leaks, charcoal production and fires in

coal piles

Geothermal Geothermal energy

HFCs HFC-23 destruction

Hydro New hydro power plants

Landfill gas Collection of landfill gas, composting of municipal solid waste, or incinerating of the waste instead

of landfilling

N2O Reduction of N2O from production of nitric acid, adipic acid and caprolactam

PFCs and SF6 Reduction of emissions of PFCs and SF6

Solar Solar photovoltaic, solar water heating and solar cooking

Tidal Tidal power

Transport More efficient transport

Table VII-9. Definitions of UNEP project types applicable for the projects analyzed in this study.

43


Annexes/Tables

Project type Number of projectsAverage project size (CO2 eq/year)



Afforestation 5 24,412 40 % 52 % 0 %

Biomass energy 373 64,399 32 % 44 % 32 %

Cement 19 169,134 17 % 16 % 37 %

CO2 usage 2 11,844 100 % 100 % 50 %

Coal bed/mine methane 47 463,085 59 % 76 % 13 %

Energy efficiency households 26 63,828 64 % 86 % 58 %

Energy efficiency industry 62 26,343 71 % 75 % 49 %

Energy efficiency own generation 181 165,611 47 % 71 % 27 %

Energy efficiency service 5 11,756 75 % 94 % 20 %

Energy efficiency supply side 27 337,861 71 % 89 % 48 %

Energy distribution 5 454,421 50 % 11 % 20 %

Fossil fuel switch 64 503,507 89 % 99 % 30 %

Fugitive 20 643,325 45 % 70 % 45 %

Geothermal 12 265,165 88 % 97 % 33 %

HFCs 22 3696,307 91 % 97 % 0 %

Hydro 986 97,704 12 % 8 % 17 %

Landfill gas 200 168,764 86 % 88 % 20 %

Methane avoidance 388 38,735 84 % 86 % 19 %

N2O 65 742,516 100 % 100 % 5 %

PFCs and SF6 14 352,765 83 % 93 % 45 %

Reforestation 23 43,279 36 % 39 % 36 %

Solar 40 26,360 73 % 66 % 18 %

Tidal 1 315,440 100 % 100 % 0 %

Transport 7 80,470 100 % 100 % 57 %

Wind 682 100,059 34 % 33 % 13 %

Total 3,276 150,472 42 % 64 % 21 %

Project category Number of projectsAverage project size (CO2 eq/year)



Afforestation and reforestation 28 39,910 37 % 42 % 30 %

Biomass Energy 251 62,288 35 % 36 % 29 %

Methane Avoidance 608 85,921 84 % 87 % 19 %

Energy Efficiency 156 283,315 73 % 92 % 42 %

Flaring and Switch 47 272,528 55 % 54 % 57 %

Industrial Gases 128 1105,125 92 % 97 % 15 %

Mining and Others 61 378,313 66 % 77 % 18 %

Renewable Energy 1,814 94,998 22 % 20 % 17 %

Waste Energy 183 164,433 46 % 70 % 26 %

Total 3,276 150,472 42 % 64 % 21 %

Table VII-10. Technology transfer by UNEP project type

Table VII-11. Technology transfer by UNFCCC project category

44


Annexes/Tables

Country



Albania 1 3 3

Argentina 23 12 311 174 14 14

Armenia 5 2 25 13 5 6

Bangladesh 2 1 10 5 5 5

Bhutan 2 1 184 92

Bolivia 4 1 381 74 95 74

Brazil 195 143 3,080 2,257 16 16

Cambodia 5 1 22 4 4 4

Cameroon 2 8 4

Chile 50 29 1,327 691 27 24

China 1,468 830 96,311 63,156 66 76

Colombia 31 13 253 147 8 11

Congo 2 5 2

Costa Rica 7 6 144 48 21 8

Côte d`Ivoire 3 21 7

Cuba 2 2 312 312 156 156

Cyprus 6 3 73 3 12 1

Dominican Republic 2 1 91 4 45 4

Ecuador 16 11 305 152 19 14

Egypt 10 5 488 179 49 36

El Salvador 6 5 292 129 49 26

Ethiopia 1 4 4

Fiji 2 1 15 13 7 13

Georgia 2 1 38 33 19 33

Guatemala 11 9 356 186 32 21

Guyana 1 32 32

Honduras 19 15 131 109 7 7

India 694 419 21,144 7,531 30 18

Indonesia 70 30 1,512 856 22 29

Iran 5 43 9

Israel 22 13 1,415 61 64 5

Jamaica 1 1 37 37 37 37

Jordan 2 1 24 22 12 22

Kenya 5 759 152

Republic of Korea 61 30 1,991 859 33 29

Laos People’s Democratic Republic 1 1 1 1 1 1

Liberia 1 1 1

Macedonia 1 22 22

Madagascar 1 1 6 6 6 6

Malaysia 93 36 544 359 6 10

Mali 1 99 99

Mexico 129 71 2,575 998 20 14

Mongolia 3 2 66 65 22 33

Morocco 5 3 249 239 50 80

Nepal 4 2 27 6 7 3

Nicaragua 5 4 216 215 43 54

Table VII-12. Investment in clean development mechanism projects by host country (USD million)

45


Annexes/Tables

Country



Nigeria 5 3 498 451 100 150

Pakistan 12 4 370 167 31 42

Panama 7 4 276 51 39 13

Papua New Guinea 1 1 108 108 108 108

Paraguay 2 2 1

Peru 25 15 1,328 363 53 24

Philippines 54 18 715 199 13 11

Qatar 1 1 260 260 260 260

Republic of Moldova 4 2 54 28 14 14

Rwanda 2 2 1

Senegal 1 9 9

Singapore 2 2 24 24 12 12

South Africa 20 14 127 91 6 6

Sri Lanka 7 7 79 79 11 11

Syria 3 9 3

Tanzania 1 1 12 12 12 12

Thailand 53 31 461 336 9 11

Tunisia 3 2 30 29 10 14

Uganda 5 1 48 19 10 19

United Arab Emirates 4 2 425 108 106 54

Uruguay 6 2 40 11 7 6

Uzbekistan 11 6 339 12 31 2

Viet Nam 64 10 1,559 229 24 23

Zambia 1 1 6 6 6 6

Total 3,276 1,833 141,734 81,529 43 44

Table VII-12. Investment in clean development mechanism projects by host country (USD million) (continued)

46


Annual Report 2011CDM fit for the present, fit for the future

47


Grant Kirkman, Stephen Seres, Erik Haites, Robin Rix,

Niclas Svenningsen, Paulo Castro, Luz Fernandez, Charlotte

Unger, Wolfgang Sterk, Christof Arens, Stephan Bakker,

Karen Holm Olsen, Nick Johnstone, Ivan Hascic, Jørgen

Fenhann and those project participants who took the time

to respond to the survey.

acknowledgements

© 2011 United Nations Framework Convention on Climate Change

All rights reserved

This publication is issued for public information purposes and is not an official text

of the Convention in any legal or technical sense. Unless otherwise noted in captions

or graphics all matter may be freely reproduced in part or in full, provided the source

is acknowledged.

For further information contact

United Nations Climate Change Secretariat

Martin-Luther-King-Strasse 8

53175 Bonn, Germany

Telephone +49. 228. 815 10 00

Telefax +49. 228. 815 19 99

[email protected]

unfccc.int

cdm.unfccc.int

cdmbazaar.int

ISBN 92-9219-086-5

Photos:

Page 4 Avijit Bhakta ‘Solar panels in India’

(CDM Project 0087 20: MW Kabini Hydro Electric Power Project, SKPCL, India)

Page 8 Meng Zhenbiao ‘Reforestation planning’

(CDM Project 3561: Reforestation on Degraded Lands in Northwest Guangxi, China)

Page 22 Chris Zink ‘Solar water heaters in South Africa’

(CDM Project 4302: SASSA Low Pressure Solar Water Heater Programme, South Africa)

Page 28 Fuping Wang ‘Power plant by night’

(CDM Project 1898: Fujian Jinjiang LNG Power Generation Project, China)

Page 36 Abeer Ibrahim ‘Vehicle scrapping and recycling’

(CDM Project 2897: Egypt Vehicle Scrapping and Recycling Program, Egypt)

Page 38 Xiaodi Cai ‘A peasant transports stalks to the project site’

(CDM Project 3965: Anhui Suzhou 2×12.5MW Biomass Power Generation Project, China)

Page 46 Evan Thomas ‘Safe drinking water in Rwanda’

(CDM Project 4799: Rwanda Natural Energy Project, Water Treatment Systems)

Art direction and design: Heller & C GmbH, Cologne

Documents

Benefits of clean development mechanism 2011